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Sony to Produce Originals for Verizon Mobile Video Service, Exec Says

In another content agreement, the mobile video service partners with Warner Music as Marni Walden expresses optimism about the outlook for the telecom giant’s media businesses.

A Verizon top executive on Wednesday declined to comment on the telecom giant’s possible interest in an acquisition of Yahoo’s core Internet business, but said the company is optimistic about the growth outlook for its media business.

Appearing at the Citi 2016 Internet, Media and Telecommunications Conference in Las Vegas, Marni Walden, Verizon executive vp and president of product innovation & new businesses, was asked how important or beneficial a Yahoo would be for Verizon. “I am not going to comment on Yahoo at all,” she said. “But what I want to say [is] there [are] all kinds of players that we would look at partnering with to bring scale to the platform” and eyeballs to the company’s media services. But “there is not one company in particular that we are thinking about today,” said Walden.

Verizon CFO Fran Shammo said in December it was “way too premature” to talk about a possible Yahoo deal.

For Millennials-focused mobile video service Go90, traditional content licensing approaches wouldn’t be successful as young consumers in focus groups never listed networks in their top 10 pieces of key content they were looking for. Instead, it was about shows and unique originals and the like. The service therefore offers the “best of live,” such as sports, music and cultural events, and emerging content, such as from AwesomenessTV, said Walden.

She mentioned two new deals that Go90 has signed with Warner Music and Sony, which will be formally announced in the coming days. “Warner will have an exclusive window on music,” Walden told the conference. “And then Sony is doing original series for us. So we are excited about that.”

The Verizon executive explained that what the company internally calls Media Co. includes such acquired businesses as AOL, Intel’s online TV unit and others, and that its key goal is to help diversify the company’s revenue streams. Connectivity will always be important, but “monetizing above the connectivity layer” is key in that regard, she said.

Walden said the Media Co. business is a flywheel that works by bringing audiences to Huffington Post, Engadget, Go90 and other Verizon content offers, distributing that content and monetizing it through advertising technology acquired in the purchase of AOL.

Advertising is the biggest revenue stream for Go90 and a new one for the company that provides a “great opportunity,” with added revenue opportunities from consumers’ data usage, said Walden. She also told the Citi conference that the company has aspirations to also launch subscriptions down the line. Those could be monthly subscriptions or pay-per-view offers if the firm has a “really rich piece of content that makes sense,” Walden said without providing further details.

Overall, Verizon is “very optimistic” for Go90 based on its usage and engagement so far, the executive told the Citi conference. “We've got certain original content that is really taking off,” she said.

Asked about skinny pay TV bundles, Walden said Verizon last year launched its Custom TV service, which was”really about getting to that customer” who isn’t happy with traditional packages. “We want to have a place for those customers to land,” she said.

The exec also acknowledged that the launch was seen as disruptive, but said “there is more disruption to come” in the industry. “We are not afraid to be disruptive," she said.

Earlier in the conference day, John Donovan, senior executive vp, technology & operations at AT&T, discussed the synergies of the telecom giant’s DirecTV acquisition, saying “so far we are right on track.”

Beyond bundles' pricing benefits, there are also platform and “customer facing” benefits, he said, highlighting that the “customer experience improvement will make a difference” for the bigger company.

Emphasizing that video consumption on wireless has been growing “dramatically,” Donovan said AT&T feels well positioned. “We’ve got the spectrum runway for the next four years,” he said.

Asked about the FCC’s upcoming broadcast spectrum incentive auction, Donovan said, “We are looking at it,” adding that the spectrum would become available after 2020 when more spectrum may be needed.